HSBC Holdings, Nationwide Building Society Tighten Restrictions On Cryptocurrency Purchases In UK

HSBC Holdings and Nationwide Building Society are imposing new restrictions on cryptocurrency purchases via credit cards for retail consumers in the United Kingdom.

The two financial institutions join the list of U.K. banks tightening curbs on crypto assets in the country. The comes as a response to a warning from the Financial Conduct Authority (FCA), the British regulator overseeing the crypto industry, regarding the risks involved in the sale and purchase of cryptocurrencies, Bloomberg reported.

Nationwide is setting daily limits of 5,000 British pounds ($5,965) on debit-card purchases of crypto assets, the financial institution said in a statement to customers Wednesday. Meanwhile, credit cards will no longer be used for transactions of crypto assets.

HSBC also announced that it has stopped customers from making crypto purchases through credit cards since last month.

Nationwide sent an email to its customers Thursday to apprise them of the cutback on cryptocurrency transactions using credit cards.

"We will be introducing restrictions on purchasing crypto currency from 28 February," the financial institution wrote in the email, adding, "The Financial Conduct Authority (FCA), who regulate the financial services industry, has highlighted certain risks associated with purchasing cryptocurrency."

HSBC also shared an email to its customers regarding a ban on crypto purchases. In the email shared on Twitter by customers, the bank said it has not allowed cryptocurrency purchases using its credit cards since Feb. 23.

The bank further highlighted that the FCA warned against investing in crypto assets, as "they're considered very high-risk, speculative investments."

"If something goes wrong, it's unlikely you'll be protected by the Financial Ombudsman Service or the Financial Services Compensation Scheme," the bank added.

In February, the FCA proposed a set of advertising rules that could see executives of crypto firms facing at least two years in prison if they failed to meet certain conditions related to the promotion of crypto assets.

"Cryptoasset businesses marketing to U.K. consumers, including firms based overseas, must get ready for this regime," the financial watchdog said in a statement. "Acting now will help ensure they can continue to legally promote to U.K. consumers. We encourage firms to take all necessary advice as part of their preparations."

The U.K. is seeing a rise in the number of banks cracking down on crypto transactions. In November 2022, Santander U.K. and Starling Bank imposed similar restrictions on crypto purchases using credit cards. Most of these restrictions are targeting transactions on the crypto exchange Binance.

Significantly, HSBC suspended credit card payments to Binance in August 2021, citing "concerns about possible risks" to its customers.

"We take our duty as a responsible lender seriously and want to do everything we can to protect you. We'll continue to monitor the situation and let you know if anything changes," the bank wrote in an email.